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The Micro-Dynamics of Catch Up in Indonesian Paper Manufacturing: An International Comparison of Plant-Level Performance

Author

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  • Szirmai, Adam

    (UNU-MERIT)

  • Van Dijk, Michiel

    (Centre for Research on Multinational Corporations (SOMO))

Abstract

In this study we analyze the micro-dynamics of catch up in Indonesian paper manufacturing using a two-country plant-level data set for the period 1975-1997. The Indonesian paper industry is selected as a case-study because it experienced spectacular investment and growth. It became one of the world's largest exporters and producers of paper in the world. We apply Data Envelopment Analysis (DEA) to compare the technical efficiency of Indonesian paper mills with that of Finnish mills, which are considered to be the world technological leaders in paper making. We address three questions: What is the distribution of Indonesian plant performance vis-à-vis the technological frontier? What is the role of entry, exit and survival for catch up? What are the characteristics of catching-up plants? We find that on average the Indonesian paper industry moved closer to the technological frontier during the 1990s. However, catch up has been a highly localized process in which only a few large establishments have achieved near best-practice performance, while most other plants have stayed behind

Suggested Citation

  • Szirmai, Adam & Van Dijk, Michiel, 2007. "The Micro-Dynamics of Catch Up in Indonesian Paper Manufacturing: An International Comparison of Plant-Level Performance," MERIT Working Papers 2007-010, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2007010
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    More about this item

    Keywords

    economic development; economic growth; technological change; paper industry; Indonesia;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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